CMO STRATEGY

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InterContinental Hotels
battles amenity creep

CMO Eric Pearson says defining and differentiating brandsis crucial, but then you must make sure they live up to the hype

■ BY NATALIE ZMUDA nzmuda@adage.com

BUSINESS TRAVELERS, well-heeled
tourists, dignitaries, celebrities and the
cast of “Glee” have all called the
InterContinental in New York’s
Times Square their home away from
home.

It’s been a busy year for the 607-
room hotel, which opened last summer, marking the largest hotel to
open in New York City in nearly a
decade. It is the company’s high-end
offering, with standard rooms costing from $350 to upward of
$700, depending on
the time of

THE CMO
INTERVIEW

TOPPLACES

year. On a Tuesday morning this
summer, employees were nattily
dressed and impeccably coiffed, as
they greeted guests and gawkers that
wandered into the modern marble
and stone lobby that was the setting
for a scene from the “Glee” Season 2
finale.

What we try to do is make sure we define clearly what the
brand is, and what it’s not. And what it’s not is going to
challenge us. What happens in our industry is people
start just bolting off. So, now I’m going to give you a free
breakfast. Now I’m going to give you a free hot breakfast.

Now I’m going to give you free WiFi. It’s amenity creep.

Once you decide what the brand isand isn’t, how do you enforce that,especially with a franchiseoperation?

Talk about a challenge. At a high level, as
a company, we have heads of brands.
Then, at the regional level, we get into
the execution. We have a whole
program; we call it the Hotel Ready
Program. As new designs, new brand
hallmarks, new initiatives come along, it
goes through the program, and then it
gets communicated properly. We have
field-based resources that make sure
the hotel is delivering. And we do hotel
visits. We do formal quality assessments,
and we do real-time surveys. We have a
system that we call Guest HeartBeat,
which basically measures your love of
the stay. We measure hotels, and we
rank them. We go in the ones that need
to be pushed up, and we spend more
time there.

Yes. Any time I travel, I do a normal
reservation through the normal
consumer channels, so I’m not treated
like royalty. I can usually go incognito.
Every now and then I’ll stay in a hotel
that has an owner I know, and it doesn’t
work that well.

Top destinations,
culled From 20
years of travel:

SYDNEY, AUSTRALIA
Walking across
Sydney Harbour
Bridge

BEIJING
Hiking the Great
Wall of China

ROME
Riding Vespas at
night

KAUAI, HAWAII
Horseback riding
along the coast

CARTAGENA,COLOMBIA

Visiting the city
where my
mother was born

about. It’s a hard decision to make, but
if you’re in for the long term, you’ve got
to make those decisions.

To be honest, we kind of let some of
the brand issues get away from us. After
some extensive research four or five
years ago, we put our money where our
mouth was. In the most difficult
economic environment, we went
through a billion-dollar renovation of our
hotels around the world. We literally
transformed every single hotel, from the
overall arrival experience, to sign in, to
the room, the showering, the amenities.
Everything was completely redone,
down to the music, and even the scent.
When you walk into the new Holiday Inn
or Holiday Inn Express, it’s a noticeable
difference.

markets outside the U.S.?

China is just a growth engine, with
double-digit growth year on year. We
literally need to hire 70,000 employees
in the next couple years. And the talent,
the war on talent, in these emerging
markets, is incredibly hard for us. In the
United States, roughly 80% of hotels
are branded. But in emerging markets, it
would be 10%. So you don’t have that
same branded infrastructure, and you
also don’t have that same base of
qualified, highly skilled hoteliers. So in
China, the big challenge right now is the
war on talent. We actually built out an
entire training academy. We had to,
because the field, the programs weren’t
producing enough qualified hotel
students.

What do you gain from staying inyour hotels incognito?

We care passionately about delivering
the brand product. And we’re not there
yet. But we continue to up our game
and our branding. We did that in the
past five years with the Holiday Inn
brand. We’ve relaunched that brand
aggressively around the world, with
3,300 hotels. And we removed 1,200
hotels in five years that didn’t make the
turn. The reason they didn’t make the
turn is they were either unwilling to
make the investment necessary, or we
didn’t think the brand exactly
represented the product that we feel
going forward is what Holiday Inn is

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How important is it to beexperimental?

Everything we do is rooted in
fundamental consumer insights. We
were aggressive in mobile years ago. We
saw it coming. We made some
investments that didn’t pan out in the
early days, but now we book
[reservations worth] over $100 million
via mobile devices in a year. Right now
we’re testing mobile check-in. Some
people don’t want to go to a front desk
and talk to a person. They want to go
right to their room. Imagine checking in
before you even get to the hotel and
walking straight to your room, and the
door unlocks.

Do you ever do secret shopping?

What are some of the challengesor opportunities that you see inWith any given hotel, there are anumber of different consumertargets. How do you make sureyou’re reaching the budget-conscious family taking a vacationbut also the business traveler withan expense account?